Your Questions About Invest In Gold Bullion

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James asks…

Gold investment due to inflation?

I’ve been hearing some people talk about investing in gold now that we expect to have higher inflation rate. What’s your take in this? Do you think it’s legit investing tips? Where do you buy gold and what kind (is it gold bars/bullions)? Is it liquid enough for resale and what type of selling cost involved at what costs?

financi4 answers:

Gold is currently very easy to buy as a traded index fund under the symbol GLD. Here is my take. I do believe that inflation is going to be an extremely great concern. The government in fact is attempting to increase inflation to stabilize the house market. They were not satisfied with the last housing bubble they created. They want to create another. They figure that inflation should create a lasting housing bubble for them. GLD is relatively cost free. The expense ratio is 0.4%, less than many mutual funds although there is no income when investing in gold. Also the tax consequences are more severe. It is considered and taxed as a collectible. One of those idiotic IRS rulings So is silver. If you are wanting to invest some money in GLD the place to do so is within a Roth IRA account since nothing within that account is taxable.

I hope that I am wrong about inflation, but if I am not then gold is going to be increasing even more than it has already increased.

David asks…

How & where do you buy gold?

My husband said we could buy funds that invest primarily in gold but wouldn’t it be safer now to physically have the gold? What is the difference between bullion bars vs gold coins? Thanks!! 🙂

financi4 answers:

Your first part of the question is technically correct, you would in fact be safer if you bought the gold physically. With gold funds you have to pay management fees, broker costs and future roll costs. Also, if the fund goes under you could lose some of your money or have it suspended by administrators for years (although for funds like the SPDR Gold trust that is very unlikely).

The difference between coins and bars is just that, one is a coin and one is a bar!! Don’t forget that gold is valued by the oz (Currently $960), the two most usual bullion bars are London delivery weight which weighs 400 oz (one bar = more than $380,000) and Kilo bars which weigh 32.15 oz (one bar = more than $30,000). Then you have to pay for bank storage.
In the USA you can buy Gold Eagle coins that are pure gold and trade at gold spot price They weigh 1 oz and less. There is often a premium to be paid and a spread by the dealers. It is worth mentioning that the US Mint has stopped production of these coins as there is a speculative bubble forming in gold.

Be very careful if you are going to buy gold as an investment. It will not protect you against inflation for the long term. It will only protect against market perceived inflation. There is also a much higher percentage of investor bought gold, just like the dot.com bubble in 2000. There is a very good chance gold can rise to $1200 to $1300 per oz in the next 6 months. But if you hold this non yielding asset for long term you will lose money.

Chris asks…

i have about 2000$ is savings bonds.. a buddy of mine says cash them in and but gold bullion.. is this safer?

and will it turn out a bigger yeild? how do YOU think i should invest it?

financi4 answers:

I would invest in Mutual Funds

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